August 3, 2018

China, Facebook and Your Data

For the the first time in its history, Facebook failed to meet the growth and revenue expectations of Wall Street. For the last four quarters, the social media giant’s North American user base has remained stagnant with 185 million users within the US and Canada. Europe brought a drop of 3 million users between the first and second quarter and, overall, only 22 million new users joined Facebook during the last quarter, world-wide – the lowest number of additions since 2011. Adding insult to injury, the company’s stock recently dropped by 20%, and the value by $100 billion, and founder Mark Zuckerberg was just bumped from the list of the world’s ten wealthiest people.

It appears even a social media giant like Facebook can’t withstand the public relations nightmares which have stemmed from 18 months of data privacy scandals ranging from Russian meddling, to selling off user data. The repercussions Facebook has experienced point to a future of higher accountability for big business in regards to data privacy and usage disclosure and, hopefully, a safer online existence for consumers.

Facebook has revealed data-sharing partnerships it has maintained over the last decade with 60 device makers through which it granted ongoing access to the personal data of users and their friends. The discovery of these partnerships and the absence of user consent affirm that the recent Cambridge Analytica scandal, in which the personal information, photos, and private messages of over 87 million Facebook users was shared with a third-party app, was not an anomaly in the company’s operating rhythm.

While the disclosure of private personal information is concerning, the aspect of this revelation which officials find most unsettling is Facebook’s relationship with a particular Chinese technology manufacturer, Huawei. Huawei is the world's third-largest smartphone maker, behind Apple Inc. and Samsung and, according to Facebook, used the obtained data to allow users to see all of their social media accounts in one place. According to a Huawei spokesperson, “Like all leading smartphone providers, Huawei worked with Facebook to make Facebook’s services more convenient for users. Huawei has never collected or stored any Facebook user data.”

So why is Facebook’s relationship with Huawei more concerning than any of the other partnerships? It has been at the center of legislative discussions for years due to its known connections to the Chinese government. In 2012, Huawei was named by the US House Intelligence Committee as a serious risk to national security.The brand’s products have been removed from three store chains operated by the Defense Department, according to Pentagon spokesperson Maj. Dave Eastburn, and the FBI, CIA and NSA have all advised Americans against purchasing Huawei phones. The ultimate worry is that Huawei phones will send the data collected from Facebook directly to Beijing -- in other words, espionage. While this may not be a huge concern for the average joe, it should make him think twice about data protection and the invasion of privacy occurring unbeknownst to him.

The details surrounding Facebook’s deal with Huawei, and whether or not it is a true cause for concern are unclear; however, it does raise the question, why are so many companies failing to protect or properly steward consumer data, and what can be done about it?